IMF Managing-Director Christine Lagarde (Photo: www.unjobs.org)
NEW YORK –2012 is well underway, and the economic outlook of the global economy still supports the strain of a faltering Eurozone and a slow-to-recover United States.
Last Monday, Managing Director of the International Monetary Fund (IMF) Christine Lagardedelivered a speech in Berlin entitled ‘Global Challenges in 2012’. This address made no attempt to mask the risks that the debt crisis in the Eurozone could pose to the world economy.
Lagarde pointed out that following a “turbulent year”, many worry about “uncertain economic prospects, dwindling job opportunities, and rising inequality”. And while the traditionally developed economies in Western Europe and North America feel the pain of limited growth, countries of the Global South are forced absorb the impacts of reduced trade with their typically wealthy partners.
“Capital flows to emerging markets have already dropped off, and growth is expected to be slow even in the most vibrant parts of the world economy. Low income countries in particular are especially vulnerable” said Lagarde.
In an apparent role reversal, some emerging markets to continue to grow through these northern economic crises. A number of African countries have experiences higher growth rates than Europe and the United States in recent times. In a December interview with CNN, Ms. Lagarde pointed out that youth unemployment still remains one of the biggest challenges facing African economies.
"There is a vibrant youth that is expecting the leadership of those countries to actually open the economy so that they can actually express their talent and find ways to get integrated in the job market," she said.
Lagarde pointed out that all countries are interconnected and that the South African economy, the largest in Africa, runs the risk of substantial damage if its European partners representing approximately 30% of its trade slide into recession. Meanwhile, the IMF chief has also congratulated South Africa for focusing on unemployment and job creation, while encouraging other African countries to follow suit.
“Make sure that the growth that you encourage, by whichever ways are available to you, it's a growth that is inclusive, that is creating jobs, because jobs are really at the heart of any development policies at the moment in South Africa, but in other countries as well,” she said.
The International Labour Organization (ILO) focuses on promoting ‘decent work’ across the globe, and sees problems with the current model of economic growth in Africa.
“In Africa and beyond, warning signs are all over the place to the effect that the current model of growth is still not in tandem with the universal aspirations of ordinary people for productive and decent jobs” said Juan Somavia, Director-General of the ILO at an October 2011 meeting in South Africa.
The ILO will join the United Nations Economic and Social Council (ECOSOC) for its Annual Ministerial Review (AMR) in July 2012, a gathering of government policy-makers focused on job creation and decent work in the framework of poverty alleviation.